DAX Index Daily Price Forecast – DAX To Continue Range Bound Price Action

European equities yesterday saw a mixed price activity in major markets across Europe. Political tensions, cues from international markets, concerns of economic slowdown etc., led to mixed activity in European markets despite prevalent risk appetite influenced by optimism surrounding Sino-U.S. trade talks. Meanwhile, forex activity surrounding Euro was also subdued as USD gained strength and concerns of no-deal Brexit weighed down market bulls. However, given the silent macro calendar schedule and lack of high impact headlines, there was no major change in price action any indices. As the week ahead is filled with high impact data, there was little activity in major markets yesterday resulting in rangebound price action.

European Flash PMI’s To Provide Directional Cues

While rangebound activity combined saw a high level of positive influence stemming from international markets, political tensions in Germany dampened investor mood resulting in slightly dovish performance as the trading session came to close for the day. As per data from the Frankfurt stock exchange, overall price action was bullish despite DAX closing slightly in red as most other major benchmark indices closed positive yesterday. Out of a total 778 stocks trading in the exchange, 417 stocks closed in green while 89 closed unchanged at end of trading session. As per data on the performance of sectoral indices from the Frankfurt stock exchange, 9 out of 18 sectoral indices closed on a positive note yesterday. As per data from the exchange, stocks from basic resources, pharma & healthcare, and technology sectors saw most gains while stocks from food & beverage, utilities and chemical sectors seeing most loss at end of trading session. Of the three most-watched benchmark indices from Frankfurt stock exchange DAX closed in red MDAX and TECDAX closed in green with -0.08%, 0.28% and 0.44% change in value at end of trading session respectively.

US Wall Street saw major indices decline sharply last night as repeated conflicting headlines surrounding Sino-U.S trade talks from recent past had left investors immune to headlines inspired rally when the report lacks solid details on progress. This led to some profit booking and usual trading activity resulting in dovish close in US markets. Asian markets opened positive, but the disappointing outcome in Caixin Services PMI and dovish cues from US markets influenced bearish price action in major indices and stocks across all major Asian markets. However, DAX futures trading in international markets were up by 0.59% ahead of the Frankfurt market hour and the European calendar is scheduled to release of Markit Composite & Service PMI’s along with the Italian Preliminary GDP update. These factors have led increased risk appetite in European investors and political tensions also seem to have been priced in. This suggests that DAX is likely to open positive but depending on the outcome of macro data and cues from the international market could see some sideways price action.

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